Information for Annuitants

When Survivor Reductions Cease

Generally, the survivor reduction for a spouse ends when your marriage ends because of death, divorce, or annulment. The former spouse survivor reduction ends if your former spouse dies, remarries before age 55, or loses entitlement to the annuity under the terms of the court order that required you to provide the benefit. The former spouse reduction does not end if you and your former spouse were married for at least 30 years, even if your former spouse remarries before reaching age 55. When you make a post-retirement survivor election, we send you detailed information describing when reductions end.

The reduction to provide an insurable interest survivor annuity stops when (1) the person you named to receive the insurable interest benefit dies, or (2) the person you named is your current spouse and you change the insurable interest election to a regular current spouse survivor annuity within two years after the last reduction to provide a former spouse survivor annuity ends, or (3) you marry and elect to provide a survivor annuity for your spouse and choose to cancel your insurable interest designation, or (4) you marry the person named to receive the insurable interest annuity and elect to provide a regular survivor annuity for him or her.

You should immediately notify us if your marriage ends, your former spouse who was married to you for less than 30 years remarries before age 55, your former spouse dies, or the person you named to receive an insurable interest survivor annuity dies. You must submit evidence (such as a divorce decree or death or marriage certificate) so we can eliminate the survivor reduction and increase your annuity to the "self-only" rate, if applicable.

Note: Your annuity will continue to be reduced if you have a current or former spouse who is entitled to survivor benefits either by your election or court order.

How Annuity Affects Your Payments From Social Security

The social security law's "windfall elimination provision" may affect the amount the Social Security Administration (SSA) can pay you. This provision affects people who spent part of their careers working for a Government agency (wherein social security taxes were not withheld) and part working at private-sector jobs wherein they paid social security taxes long enough to qualify for SSA payments. Under this law, the SSA uses a modified formula to calculate your payment, resulting in a lower benefit. The modified formula applies to you if you reach age 62 after 1985 and first become eligible for a monthly pension after 1985 based in whole or in part on work wherein you did not pay social security taxes. The "windfall" provision does not affect the amount OPM pays you.

Please contact your local social security office or call 1-800-772-1213 for specific information about how this provision affects you.

Civil Service Retirement System (CSRS) Offset Employees

Federal employees hired or rehired on or after January 1, 1984, who were covered by both the CSRS and social security at the same time are called CSRS offset employees. CSRS offset employment time is used to compute the annuity we pay you. However, the law imposes a reduction (or offset) in the amount of CSRS annuity we can pay because the same employment time is also used in computing a social security benefit. The CSRS annuity for offset employees will be reduced when the person becomes eligible for social security retirement benefits, usually at age 62. We contact the SSA just before the offset employee is 62 to ask how much SSA would pay figuring their benefit with and without the CSRS offset service. Based on their reply, we make the annuity reduction.

The offset reduction is the lesser of the:

1. Difference between the SSA monthly benefit amounts with and without CSRS offset service, or
2. Product of the SSA monthly benefit amount with Federal earnings multiplied by a fraction where the numerator is the employee's total CSRS offset service rounded to the nearest whole number of years and the denominator is 40.

The CSRS offset reduction will begin the first day of the month in which the person is eligible for both Civil Service annuity and a social security benefit. If the offset employee is already age 62 at retirement, the reduction will start on the date we start payments.

Federal Income Tax and Your Annuity 

Your annuity payments are subject to Internal Revenue Service (IRS) rules. We report your payments to the IRS. If you do not file the required tax returns, you could be subject to penalties, interest, and potentially a levy against your annuity. For a detailed explanation about Federal tax and your annuity, request IRS Publication 721, "Tax Guide to U.S. Civil Service Retirement Benefits." We do not provide detailed tax advice or supply IRS publications.

If we do not have information about your Federal tax withholding rate, we will withhold as if you are a married person claiming three allowances. You can change your Federal tax withholding at any time by using a touch-tone phone to call our toll-free number at 1-888-767-6738. If you are calling within the local Washington, DC, area, dial 202-606-0500. Or write to:

U.S. Office of Personnel Management
Retirement Operations Center
P.O. Box 45
Boyers, PA 16017-0045.

State Income Tax and Your Annuity  

To start, stop, or change the amount of state income tax we withhold from your payments, use a touch-tone phone to call us or write to the address shown for Federal tax changes. If your state does not participate in our State Tax Withholding Program, the computer system will not accept a request to withhold state tax.

Changing to Disability Retirement

You can apply to change to disability retirement by submitting your application within one year after separating from Federal employment. To do this, you and your former employing agency must submit evidence that shows you became disabled while employed in a position subject to Civil Service Retirement System coverage, and that you were unable to perform useful and efficient service because of disease or injury in the position from which you retired. Your former agency will have to certify that it could not reasonably accommodate your condition, and you must not have declined an offer of reassignment to a vacant position in the commuting area at the same grade or pay level and tenure. We must receive your application within the one-year filing deadline.

The one-year filing limitation can be waived only if you were mentally incompetent at the time of separation or became so within one year thereafter. In such a situation, the application for disability retirement may be filed within one year from the date you are restored to competency or a guardian or fiduciary is appointed, whichever is earlier.

If you met the age and service requirements for an immediate voluntary retirement when you separated from the service, there may not be any advantage to you in changing to a disability retirement. Additionally, your annuity rate would generally be the same as the amount payable had you retired due to disability.

There are some disadvantages, however. If you are under age 60, it could be determined that you have recovered from your disability or that you can earn a living - in either case, your annuity could be terminated or recomputed at a lower rate.

There is no risk of this when you receive a non-disability retirement. Also, you must pay for the cost of obtaining the medical evidence we require in connection with your application or in connection with periodic reviews conducted to determine that you have not recovered from your disability. Any questions concerning the tax implications of changing to a disability retirement should be addressed to the IRS.

If we have approved a disability retirement and you have been separated from your agency, you cannot change to a non-disability retirement. If you are later found medically recovered or restored to earning capacity, you may be entitled to another type of annuity.

Returning to Work in the Federal Government

You have the same rights as anyone else seeking a Federal job. If you are reemployed by the Federal government, you and your agency must notify us in writing.

One of the following situations will apply to you:

1. If your retirement was based on an involuntary separation (except for mandatory retirement because of age in certain positions), the separation wasn't due to misconduct or delinquency, and the job is covered by a Federal retirement system, your annuity will stop effective the day before you start work. However, if your job is not covered by a Federal retirement system, your annuity payments continue but your salary is reduced by the amount of annuity you receive; or
2. If your retirement was based on a voluntary separation (including early-optional retire- ment during a reduction-in-force or major reorganization) or on an involuntary separation that you caused due to misconduct or delinquency, or if you retired under a mandatory age provision, your annuity continues while you work. Your salary is reduced by the amount of the annuity you receive; or
3. If you retired for disability, see RI 30-13, Information for Disability Annuitants, for a full explanation of the effect of Federal reemployment on your annuity.

After you quit working, the following applies:

If your annuity stopped because you took the Federal job, your future retirement rights are normally controlled by the law in effect when you leave your new job. If you separate from the Federal service more than one year after your date of reemployment, you have the same retirement rights as any other Federal employee with the same age, length of service, and kind of separation.

If your annuity continues while you work and you work full-time for one year (or the equivalent of one year on a part-time basis), you may be eligible for a supplemental annuity after you leave the job or move to another job that requires only intermittent work. To obtain a supplemental annuity, you must apply to us. You will be asked to pay a deposit (unless you elected to have retirement deductions withheld from your salary) to cover the reemployment service.

After completing at least five years of continuous service (or part-time service which is equivalent to five years of full-time service), you may have your entire annuity recomputed under the law in effect at the time you leave the job if you pay a deposit (unless retirement deductions were withheld from your salary) to cover the reemployment service. The amount of the deposit will equal the amount of the retirement deductions that would have been withheld from the full salary of your position, plus interest.

If you are reemployed on a part-time rather than full-time basis and your annuity continues, your annual annuity is converted to an hourly rate that is used to reduce your salary. For example, if you receive a gross annuity of $750 per month and you work part-time 24 hours per week, the offset is computed as follows:

($750 x 12 months) divided by 2087 hours per year = $4.31, the hourly rate of your annuity. This amount is subtracted from the hourly rate of your pay.

Thus, if you work 24 hours a week, your biweekly pay would be reduced by $206.88 ($4.31 per hour x 24 hours per week x 2 weeks).

RI 20-59
Revised April 1999
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